Sika's H1 2025 Sales Decline 2.7% YoY, Gross Margin Remains Stable at 55.1%

Sika reported a 1.6% increase in sales in local currencies in H1 2025, but a 4.3% decline in Swiss francs due to a weak dollar. The company's gross margin remained stable at 55.1%, while the EBITDA margin rose to 18.9%. Sika continues to expand through acquisitions and new plant openings, focusing on AI and digital infrastructure. Despite a challenging market in China, the company remains confident and expects a slight increase in sales for the full year, targeting an EBITDA margin of 19.5-19.8% and confirming its 2028 growth targets.

Sika AG (SIX:SIKA) reported a 1.6% increase in sales in local currencies for the first half of 2025, despite a 4.3% decline in Swiss francs due to a weak US dollar. The company's gross margin remained stable at 55.1%, while the EBITDA margin rose to 18.9%. Sika continues to expand through acquisitions and new plant openings, focusing on artificial intelligence (AI) and digital infrastructure. Despite a challenging market in China, the company remains confident and expects a slight increase in sales for the full year, targeting an EBITDA margin of 19.5-19.8% and confirming its 2028 growth targets [1].

In the first half of 2025, Sika's sales in local currencies amounted to CHF 5,676.4 million, representing a 2.7% decrease from CHF 5,834.8 million in the same period last year. The company's organic growth slowed to 0.6%, with acquisitions contributing an additional 1.0% to overall growth. Despite the sales decrease, Sika maintained its material margin at 55.1% and improved its EBITDA margin to 18.9% [1].

The company's strategic initiatives and acquisitions include the acquisition of Elmich in Singapore, Cromar in the UK, HPS in the USA, and Gulf Additive in Qatar. Additionally, Sika formed a joint venture with Sulzer in Switzerland to advance plastic recycling and invested in Giatec Scientific in Canada for digital concrete technology platforms. The company also commissioned seven new production facilities across the globe in Singapore, China (Xi'an and Suzhou), Morocco, Kazakhstan, Ecuador, and Brazil, strengthening its manufacturing footprint in key growth markets [1].

Sika's performance varied significantly across regions, with the Americas and EMEA showing growth while Asia/Pacific experienced a decline. The Americas region led with 3.5% growth, followed by EMEA at 1.9%, while Asia/Pacific contracted by 1.7%. The company's balanced business mix across different market segments has helped maintain stability despite regional fluctuations [1].

Despite the challenging market environment, Sika has confirmed its strategic medium-term targets for 2028, maintaining its focus on growing above market rates and improving margins. The company aims to achieve 6-9% annual growth in local currencies, an EBITDA margin of 20-23% (once MBCC synergies are fully realized), operating free cash flow above 10% of net sales, and return on capital employed (ROCE) of 20-25% [1].

References:
[1] https://www.investing.com/news/company-news/sika-h1-2025-presentation-16-growth-in-local-currencies-amid-margin-expansion-93CH-4156422